Executive Summary
When meeting with a prospective client for the first time, two of the advisor’s primary goals include making a positive impression on the prospect and determining whether the prospect will be a good fit. However, if the prospect feels nervous about the advisor potentially judging their previous financial decisions, they might become uncomfortable or defensive when asked direct questions about their financial situation. And without asking the prospect about their financial history, the advisor might be challenged to determine whether the prospect would be a good fit for their services. Given this delicate balance, one particularly helpful question for the advisor is to ask, “Have you ever worked with a financial professional before?”.
This versatile question, along with relevant follow-up questions based on the prospect’s answer, can help advisors understand not only what the prospect really wants, but also how much financial planning education the advisor will need to provide to help the prospect identify and attain their goals. For example, many consumers who have never worked with a financial planner before don’t understand what advisors actually do for their clients. Additionally, prospects don’t always understand what a financial plan consists of or how they can benefit from using one. And prospects who have worked with an advisor before might come with unrealistic expectations about what they want from an advisor.
For prospects who previously worked with an advisor, good follow-up questions include asking about the length of the relationship with the previous advisor (which may give insight into when the prospect decided to examine their financial goals); why the relationship with the previous advisor ended (to see whether the advisor did something that made the prospect unhappy); and what the prospect found was most beneficial from working with their previous advisor (which can show the values the prospect finds most important).
And for prospects who have not worked previously with an advisor, helpful follow-up questions include what led them to take action now (to see what motivates them and whether they recently experienced a major life change); with whom they currently talk about their finances (to learn about alternate sources of information for the prospect); and what questions they have about the client-advisor relationship (which can show why the client wants to work together in the first place).
Ultimately, the key point is that the question, “Have you ever worked with a financial professional?” can be a useful tool for advisors not only to illustrate their value to new prospects, but also to determine potential fit. It can help them understand how much the prospect knows about the financial planning process as well as their experiences with previous advisors. And by asking appropriate follow-up questions, the advisor can learn everything from the prospect’s motivations for approaching the advisor to their expectations for the relationship. In the end, this conversation can help both the advisor and the prospect decide if a working relationship together can be beneficial and – possibly even more important! – one that they will both enjoy!
A Prospect’s Past Financial Planning Experiences Provide Advisors With Clues Around Education Gaps And Relationship Expectations
There’s a lot riding on financial advisors when they meet with new prospects: will the prospect like them, and will the advisor like the prospect? Does the advisor want to solve the prospect’s problems (does the prospect’s pain point fit within your service model), and can those problems be solved in a way that will motivate the prospect to engage with the advisor?
Importantly, the answers to these questions can be complicated by what the prospect knows (or thinks they know) about financial planning. Which is why asking prospects, “Have you ever worked with a financial professional before?” can serve as a simple gateway question that can be asked in all prospect meetings, as it naturally brings up many “fit factors” that determine if the prospect and the advisor want to work together through dialogue. It also helps advisors unlock information about not only what the prospect really wants, but also how much financial planning education the advisor will need to provide to help the prospect get to where they want (and need) to go.
Many Prospects Lack Basic Knowledge About What Advisors Do And What A Financial Plan Is
Many consumers who have never worked with a financial planner before don’t understand what advisors actually do (or don’t do) for their clients. Very often, prospects new to financial planning may assume that the financial planner’s sole job involves managing investments or insurance. As such, these prospects will benefit from being taught about the actual breadth of services of the advisor, in addition to the extent that the financial advisor will play in helping clients implement each aspect of their plan.
Additionally, prospects don’t always understand what a financial plan consists of or how they can benefit from using one. Is it a one-page document? Does it come in a giant binder? Is it updated every year? It’s important for advisors to help prospects understand exactly what to expect from the planning process and to highlight the unique services that the advisor’s firm offers, including other areas of financial planning that may benefit the prospect (e.g., financial psychology, career consulting, coaching, etc.). If the advisor caters to a particular niche, then explaining some specific niche services that are relevant to the prospect may be important differentiators to weave into the conversation.
By asking prospects, “Have you ever worked with a financial professional before?” and following up with details around the prospect’s experience, the advisor can often assess how deeply and thoroughly they need to discuss basic financial planning issues before moving into more nuanced topics that address the prospect’s particular situation.
Prospects Often Need Help Understanding How The Financial Planning Process Works
In addition to a new prospect’s confusion around the services they can expect to receive when they do become a client, prospects often don’t understand the process of financial planning. How does the process work? What does the advisor do to actually create a plan? Using the question, “Have you ever worked with a financial professional before?” can help advisors address knowledge gaps here, too.
For example, if the prospect has a tax issue for the advisor, how does the advisor explain the process to help the prospect understand how they will solve it? Asking the prospect about their past experience with any financial professionals they have worked with previously can offer important insights into not just what the prospect knows about the planning process, but also what they like (or dislike) about how their financial decisions are made. Perhaps they have worked with a CPA in the past, meeting once a year during tax time. Their CPA had recommended that they consider increasing 401(k) plan contributions, starting contributions to an HSA, or opening an IRA, but without discussing the benefits and drawbacks of each option, the prospect had no idea which option to follow through on, let alone whether they even had access to each option!
Knowing that the prospect values their CPA for suggestions, but also wants more support and guidance through the decision-making process, is valuable information for the financial advisor. Not only does this open the door to address what specifically the prospect finds valuable (someone to help them make the right decisions), understanding past relationships with financial professionals also allows the advisor to provide relevant context that the prospect is familiar with, such as when explaining the firm’s meeting process (e.g., financial planning meetings tend to occur more than just once a year at tax time, especially for brand new clients).
For prospects who haven’t worked with a financial professional before, understanding who they do speak to about financial decisions, if anyone, can help provide advisors with valuable insight about how they like to communicate. For instance, by understanding who they talk to and how they have followed through, the advisor might glean what the prospect may have valued most about getting advice – be it the actual information exchanged, the support from the relationship, or both.
Past Financial Planning Experience Can Reveal Information (And Red Flags!) About A Prospect’s Relationship Expectations
In addition to providing information around a new prospect’s financial planning experience and knowledge, asking about past financial planning experience can give the advisor insight into the prospect’s view of what it means to have a financial planning relationship and the expectations they have of that relationship, which are important points to help determine a suitable fit.
For instance, perhaps the prospect is very young and has no past experience working with a financial professional. They meet with an advisor and indicate that they would like to hire them because they desperately need help managing their significant debt levels. More than anything, they need help organizing their finances and developing a debt repayment strategy, and neither retirement nor education planning (where the advisor’s main area of expertise lies) is of immediate concern. While there is nothing wrong with being in that situation and seeking help (it’s great that they want to get organized and pay down their debt!), it would probably be most beneficial for the prospect and the advisor to acknowledge that working together would probably not be a good fit. Instead, the advisor may suggest another professional who specializes in debt management or some easily accessible and affordable resources for the prospect to research on their own.
Yet another example – consider a wealthy prospect who is going through a major life transition during a difficult divorce and needs help organizing her estate plan. But she wants to talk… a lot! Again, there is nothing wrong with coming to an advisor for help with her concerns, but if the prospect’s relationship needs are not something that fits the firm’s service model, this is an important conversation to have. However, the advisor doesn’t need to turn away a prospect if the fit isn’t completely perfect; perhaps the advisor specializes in estate planning and can absolutely help the prospect with their financial planning needs, but decides that working in tandem with other professional service providers will ensure that the client has all of their other professional-relationship needs met. Accordingly, the advisor may recommend that the prospect establish a ‘team’ of professionals and suggests teaming up with a mental health professional who can offer the prospect support with her emotional challenges, and at the same time refers her to a divorce lawyer, with whom she can discuss her legal concerns.
While asking a prospect about their past experience can give advisors insight into education gaps, and whether their service model can meet the client’s relationship needs, advisors should also be wary about prospects who engage multiple financial advisors over a short period of time, pitting them against each another with the adversarial intent of seeing who has the best ‘returns’ and churning through advisors year after year. In these instances, it is very important to have a conversation about fit and expectations as early as possible. More likely than not, most advisors would consider such prospects ‘red flags’, knowing that a relationship with such a client would probably be very difficult to maintain – the client would probably require a very high level of attention and would be prone to fire the advisor at any time, as they constantly seek to find ‘better’ advisors who promise more in return for less.
Good Follow-Up Questions That Explore A Prospect’s Past Financial Planning Experience
Advisors who explore a prospect’s past financial experiences can benefit most from the discussion by asking good follow-up questions. And choosing the right follow-up questions to ask will largely depend on whether the prospect has – or has not – worked with an advisor before. Either way, the goal of the conversation will be similar – the advisor is generally trying to understand if there is a potential fit and, if so, using the conversation to illustrate how they provide value to clients.
Additionally, asking a prospect if they have ever worked with a financial professional before allows the advisor to engage in a conversational dialogue that is more comfortable for the prospect than a clinical fact-finding interview. Which is important, especially during a first meeting, because using a fact-finding approach may cause the prospect to feel uncomfortable or defensive (perhaps the prospect feels ashamed about the financial situation they are in and is worried the advisor will judge them for their ‘bad’ behavior) or distrust (maybe the prospect suspects the advisor is just determining how to pitch some financial product to them that they don’t really need). Questions about actual financial knowledge or financial status, although valuable, are better asked once the prospect has developed some trust in the advisor, and when they can arise organically through a conversational dialogue when the prospect (or client) feels at ease to share sensitive information.
Three Great Follow-Up Questions For Prospects Who Have Previously Worked With A Financial Professional – Issues & Values
If the prospect has had experience with a financial professional, advisors can ask about the experience as a way to assess what the prospect’s issues are and what they value most in a financial planning relationship. Which is also valuable, as these priorities offer an opportunity for the advisor to be introspective about their own service model and to determine how it can benefit the prospect.
Three important follow-up questions that an advisor can ask a prospect who has previously worked with a financial professional can explore how long ago the relationship took place, why the relationship ended, and what about the experience was most beneficial.
How Long Ago Was The Relationship With Your Previous Financial Advisor?
Asking the prospect a follow-up question to identify how long ago the relationship with their last financial advisor took place can matter because it may give insight into when the prospect decided to examine their financial goals. This can be important because it can give insight into major factors that affected the prospect’s life enough to seek out financial planning.
For example, perhaps the prospect sought a financial advisor in the past because they changed jobs, or maybe it was because they needed help with their finances after a parent passed away. Answers like this are valuable because they can give the advisor clues about the client’s background and history. They also provide an opportunity for the advisor to demonstrate that they are listening to the prospect and that they consider what they say as important. This can also help the prospect realize and acknowledge their need for help with another financial professional.
In addition to asking how long ago the relationship with the last advisor was, asking about how the service model was structured (e.g., AUM, hourly, retainer) can also help the advisor to understand if the prospect has investable assets and to assess their familiarity with such service models.
Why Did The Relationship With The Last Financial Advisor Ultimately End?
In addition to asking when the relationship with their last advisor ended, asking why it ended can also be insightful. For instance, a relationship that ends because of the nature of the service provided (e.g., a one-time financial plan) is very different from one in which the advisor is fired for doing something that made the client unhappy (and gives the advisor an easy segue into asking the prospect what type of services they are seeking – an ongoing relationship or one-time plan?).
If the prospect left their last advisor because they were unhappy with the experience, a good follow-up exploration could examine why they were unhappy. Was their last advisor not communicative, or were they upset about their investment returns? If the issue involved communication, the advisor could explore how often the prospect does want to connect to see if their expectations can be met with their service model.
If the issue relates to investment performance or disappointing advice, the advisor can learn more about the prospect’s risk tolerance or ask about why the advice they were given disappointed them. These conversations can help the advisor learn more about the types of issues they may face with the prospect if they end out engaging as a client.
What Did They Do That Was Most Beneficial For You?
Asking the prospect about what was good about their past relationship and what they accomplished that they were proud of can highlight the values the prospect deems most important. Yes, these are values based on experiences with someone else, but there will likely be themes around relationship, structure, accountability, and organization that can give the advisor ideas about what the prospect will value in their next relationship.
This follow-up question matters because not only does it help the advisor illustrate how their service model aligns to the heart of what the prospect values most, but it will also remind the prospect of positive experiences, which can put them into a good mindset that will motivate them into signing up as a client.
Three Great Follow-Up Questions For Prospects Who Have Not Previously Worked With A Financial Professional – Why & How
If a prospect has never worked with a financial professional before, the follow-up questions that an advisor asks still help to assess fit but will focus more on why the prospect is seeking help now, and how they want to receive help. Whatever their reason, the common theme is likely to be that the prospect is here now because something has recently happened that is bothering them enough that they have reached out to an advisor. The important question to explore at this stage is whether the advisor and prospect can benefit from working together, and will they both enjoy it?
Three questions that an advisor can ask a prospect who has never worked with a financial professional before can explore the reasons the prospect is taking action now, who (if anyone) they have received financial advice from in the past, and what the prospect would like to know about the planning process itself.
What Led You To Take Action Now?
Understanding what situation is happening now can help the advisor start to understand the prospect’s value, especially when they have never worked with a financial professional before. Asking what is different for the prospect now, or what is hurting so much that they don’t want to face it alone, helps the advisor not only identify why the prospect wants help but also glean insight into what motivates the prospect and whether the advisor’s services can help them solve their problem.
This is also a good question for advisors to practice good listening skills. By engaging in active listening, advisors can demonstrate how they value the relationship by reassuring the prospect that they are truly listening to what they say.
With Whom Do You Talk About Your Finances With Right Now?
Knowing who the prospect talks to for financial advice is not as important as understanding what they think of the advice they get. But starting with asking, “Who?” can be a simple way to broach the subject and start the conversation. Just because the advice doesn’t come from a professional source says nothing about how the prospect values it. If the prospect loves talking to their uncle and mentions that they have often sought his advice, the advisor can anticipate that the prospect is likely to discuss their meeting in great detail with the uncle. And exploring this early on can absolutely help the advisor understand if there will be a good fit.
For example, consider the prospect who values talking to their uncle for financial advice. The advisor can ask about what is lacking from the conversation that has made the prospect come to see them? What else would they want out of a relationship with the advisor that the uncle cannot provide? If they value their uncle’s opinions and feedback on financial advice, would they want him to be included in meetings, too? Can the advisor expect that the prospect will always want to vet their uncle’s ideas? Asking these questions can give valuable insight for the advisor into the client’s “hows” and “whys”.
What Questions Do You Have About The Client-Advisor Relationship?
Knowing what questions prospects have about the client-advisor relationship can reveal important information about why the client wants to work together. Are they worried that the advisor’s job is only to manage investments? This can signal that it is important for the prospect that they get support in broader areas beyond investment management. Are they afraid they will have to read through an enormous binder of financial projections? This can signal that the prospect wants help and guidance to understand their financial situation.
The questions that prospects ask about the relationship also help the advisor assess fit – they illustrate the values and priorities the prospect has about working style. How will we work together? What will that look like? What can I expect over the next few months or during the first year as we start working together? Importantly, how the advisor answers these questions will also help the prospect determine if the advisor will be the right fit for them.
How To Ask Prospects If They Have Ever Worked With A Financial Professional
The question, "Have you ever worked with a financial professional?” can be considered a Swiss-army knife when it comes to prospect meeting questions, simply because of its versatility. With very little crafting via the right follow-up questions, it can take the discussion to many different places depending on where the advisor wants to go. But how can advisors introduce the question, and how can the answers be interpreted?
This question is safe in the sense that it is not likely to make the prospect feel uncomfortable or defensive if asked – advisors do not need to worry about offending the prospect by asking it, nor should they be concerned about how to respond to the prospect’s response. Accordingly, advisors can ask this anytime – they can open the meeting with it to get things started, or follow up with it if the prospect initiates the meeting by jumping right in by explaining their issues.
Interpreting Client Responses And Choosing Good Follow-Up Discussions
Depending on how the answers are interpreted, there are many directions the advisor can take through follow-up questioning. For example, if the prospect suggests they were unhappy with their past experience, the advisor can explain how they are different with respect to their services and the client experience offered by their firm. On the other hand, if the prospect was satisfied, the advisor might instead choose to explain how their services will be similar, or even how they might arrange to work in tandem with other professionals or non-professionals the prospect wishes to maintain relationships with.
Finally, if the prospect indicates that they have worked with many previous professionals over a short period of time and that they have been unhappy with some aspect of each of their previous advisors, this can signal an unreasonable or difficult client relationship that the advisor may prefer not to get involved in.
Here are some common ways a prospect might describe their past experience working with a financial professional and how an advisor might interpret (and follow up to) their response:
- Prospect Answer: Yes, I have an EA that helps me with my taxes. It is a great relationship, but I think I need help beyond taxes this year.
Interpretation: The prospect can benefit from additional services. They would probably be interested in hearing about the other services the advisor provides, and whether the advisor would be willing to work with their tax professional (who they indicated they enjoy working with). The advisor can also ask follow-up questions about what they mean by “help beyond taxes this year” to further clarify the prospect’s needs.
- Prospect Answer: Yes, I have two other financial advisors that manage my money. I like to compare their returns to one another, and I am looking to spread my money around more to diversify.
Interpretation: This prospect does not really understand diversification and is highly focused on maximizing returns. If this is the only aspect of financial planning that is important to the prospect, an advisor offering comprehensive planning would not be a good fit for them and may simply wish to refer the prospect to an investment management firm. Otherwise, a conversation exploring how financial planning goes beyond investments may be useful to help the prospect understand how a relationship can benefit them.
- Prospect Answer: I have no prior experience with a financial professional. I spoke to my dad a lot when I started my investment account and the 401(k) plan representative at work, but nothing is really ongoing – that is why I am here.
Interpretation: This prospect might benefit from understanding how there is more to financial planning than investment management. Asking a few follow-up questions about what else they might want to talk about or what has recently happened to make them think that having an ongoing relationship would be advantageous.
- Prospect Answer: I had a financial planner, but they didn’t call very often.
Interpretation: Continual or frequent communication matters to this prospect, but it’s not clear how much will be enough. Advisors can describe their typical meeting cadence, but specifically asking what would work best for the prospect can help them understand the prospect’s communication needs to determine whether those needs can be met – a prospect who wants to have meetings every month or 3-hour meetings every quarter might not be a sensible fit for the advisor.
- Prospect Answer: I loved my previous planner, but they moved, and so we needed to find someone new.
Interpretation: Meeting in person is a high priority to the prospect. Discussing whether this is something the advisor or their firm can accommodate is important. Furthermore, the advisor can also ask the prospect how they feel about virtual meetings if geography may be an issue.
For prospects who have worked with an advisor before and disclosed that it was a negative experience – advisors can benefit from listening to what they have to say, but there is no need to fan the flames by accusing or belittling the past advisor’s ability.
Instead, advisors can create the most value in these scenarios by differentiating themselves while keeping the conversation positive and professional, without using a response implying that the advisor thinks they are better than the prospect’s past professional. Additionally, repeating what they just heard back to the prospect helps to illustrate that the advisor is paying attention to the prospect and understands what they are seeking.
For example, consider a prospect who says, “I worked with a financial advisor who was terrible – they never returned my calls, and they actually gave me bad advice because they never took the time to understand me.”
A good response can go something like, “Thank you for sharing your past experience – this is so helpful. Correct me if I am wrong, but I am hearing you say that it would be really valuable for us, if we work together, to spend time to talk about your unique goals. We can even set up a schedule where we can check in with each other to ensure that your needs are being met and that you have ample opportunity to update us on life events.”
For advisors who aren’t comfortable interpreting responses very quickly or who want to buy some time before deciding which follow-up questions to ask, one option is to ask the prospect for further context or for clarifying details about what they just said.
For example, consider these follow-up questions:
- Thank you for sharing how you would like more communication. Tell me more about what ideal communication looks like for you.
- I hear you say that in-person meetings are important to you. Is that correct? Would you always prefer to meet in person?
While it is okay for the advisor to try to understand or intuit some meaning from what the prospect says, it is also valuable to ask follow-up questions to ensure that they got it right.
Acknowledge (And Compliment!) Prospects With No Previous Experience Working With An Advisor
Prospects who have never worked with a financial professional before are taking a huge step in coming to see an advisor for the first time. Accordingly, advisors can take a moment to offer the prospect a genuine and well-deserved compliment!
Some ways that an advisor can praise first-time prospects:
- Wow, this step you’re taking is huge! It's so cool that you are making this change for the benefit of your financial future!
- Let me stop and just recognize this for a moment. It is not an easy decision to come in to see a financial advisor for the first time. I am so happy you are here.
- Wonderful, that is so great! You’ve never worked with a financial professional before, and now here you are! You’re already on the path to change and taking the first step, which is often the hardest step. I’m so glad to be here with you.
Prospect meetings can be difficult to plan because we don’t know who the prospect is, and they don’t know us. Yet we both (might) know that this could be the beginning of a lifelong relationship. Accordingly, asking about previous experiences can offer valuable insight, as is often the case when considering other lifelong relationships.
Asking new prospects, “Have you ever worked with a financial professional before?” is a normal get-to-know-you, low-stakes question that can open the door to great relationship-building conversations through organic follow-up questions. This helps both the advisor and the prospect decide if a working relationship together can be beneficial and – possibly even more important! – one that they will both enjoy!
Advisors – Don’t forget reflections on their answers, and affirmations of their positive choices! Thank you Meghaan for the work you do!